Opinion
No. 27970.
January 6, 1930.
1. INSURANCE. Where life insurer presented past-due note for premium, and insured refused to pay note, one claiming under insured could not insist on waiver of forfeiture.
Where life insurance company, being reasonably willing to waive default in payment, presented past-due note for premium, and insured refused to pay note, one claiming under insured could not insist that insurance company waived forfeiture, since position was that of positive active wrong in transaction.
2. INSURANCE. Life insurance is matter of contract. and such contracts are creatures of voluntary assent or agreement.
Life insurance is a matter of contract, and such contracts are creatures of voluntary assent or agreement.
3. INSURANCE. Where life insurer offered to waive forfeiture, but insured refused to accept by refusal to pay note, there was waiver of insurer's waiver.
Where life insurance company offered to waive forfeiture for nonpayment of note for premium by accepting payment of past-due note, it was an offer which insured could accept or reject, and when he refused to pay note he refused to accept offer, and thereby waived insurance company's waiver.
APPEAL from circuit court of Winston county. HON. JOHN F. ALLEN, Judge.
Reily Parker, of Meridian, for appellant.
Without regard to how clear and unmistakable could be the terms of any insurance policy fixing the right of the insurer to declare a forfeiture, it cannot be said that the insurer could thereby deprive itself of the right and power to waive such a forfeiture.
New York Life Ins. Co. v. O'Dom, 100 Miss. 292, 56 So. 379; London Guarantee Accident Co. v. Miss. Central R.R. Co., 52 So. 787.
The rule has become generally accepted that even though provision is made in a note executed by the insured or any receipt for such note given for a premium that the note, receipt and contract of insurance shall be absolutely void if the note is not paid at maturity, the policy itself containing no like ground or right of forfeiture, such provision is general and is itself without effect to terminate the insurance.
Coughlin v. Reliance Ins. Co., 201 N.W. 920; Manhatten Life Ins. Co. v. Packer, 85 So. 298.
By retaining the notes and attempting to collect the full premium for the entire term, the company waived the forfeiture and is liable for the amount of the policy.
Lemerick v. Home Ins. Co. of N.Y., 150 S.W. 978; Walls v. Home Ins. Co., 71 S.W. 650; Security Life Annuity Co. v. Underwood, 150 S.W. 293; Shawnee Mutual F. Ins. Co. v. Cannady, 129 P. 865; Williams v. Empire Mutual A. L. Ins. Co., 68 S.E. 1082.
A claim of a forfeiture for nonpayment of a premium note is inconsistent with a subsequent demand for the payment of such note and a notice that if the note is not paid, suit will be brought thereon and that by so doing, a waiver of forfeiture is made.
Marden v. Hotel Owners Ins. Co., 39 A.S.R. 316.
Wells, Jones, Wells Lipscomb, of Jackson, for appellee.
Conditions in policies as to forfeiture for nonpayment of premium on a specified day or within a specified time are valid, and enforceable in the absence of statutory provisions to the contrary or except so far as limited by statute; and the time fixed for payment is binding in the absence of fraud or mistake.
2 Joyce on Ins., sec. 1100, p. 2208; 2 Joyce on Ins., sec. 1103, p. 2215; New York Life, etc., v. Alexander, 122 Miss. 813, 85 So. 93; Wheeler v. Connecticut Mutual Ins. Co., 82 N.Y. 550, 37 Am. Rep. 597; New York Life Ins. Co. v. O'Dom, 100 Miss. 219, 56 So. 379.
In the absence of a statute, a contract made between the insured and the insurer, providing that a policy shall cease to be in effect, if a note, which has been given for the payment of a premium on the policy, is not paid at maturity, is a valid contract, and no affirmative action by the insurer cancelling the policy is necessary.
Iowa Life Ins. Co. v. Lewis, 23 S.Ct. 126, 187 U.S. 335, 351, 47 L.Ed. 204; Manhatten Life Ins. Co. v. Wright, 126 F. 82, 85, 61 C.C.A. 138; Lefler v. New York Life Ins. Co., 143 F. 814, 74 C.C.A. 488; New York Life Ins. Co. v. Slocum, 177 F. 842, 847, 101 C.C.A. 56; Reed v. Bankers' Reserve Life Ins. Co. (C.C.), 192 F. 408, 411; Philadelphia Life Ins. Co. v. Hayworth (C.C.A.), 296 F. 339, 343; Wastun v. Lincoln, 12 Fed. Rep. 2d 422; Duncan v. Mo. State Life, 160 Fed. 646, 87 C.C.A. 542; Marshall v. Mo. State, 148 Mo. App. 669, 129 S.W. 40; Iles v. Mutual Reserve, etc., 95 P. 522, 50 Wn. 49, 18 L.R.A. (N.S.) 902, 126 Am. St. Rep. 886; National Life Ins. Co. v. Manning, 86 S.W. 618, 38 Tex. Civ. App. 498; Stephenson v. Empire Life Ins. Co., 139 Ga. 82, 76 S.E. 592; Jefferson Mut. Ins. Co. v. Murry, 86 S.W. 813, 74 Ark. 507; Cohen v. Continental F. Ins. Co., 67 Tex. 325, 60 Am. Rep. 24, 3 S.W. 296; 25 L.R.A. (N.S.) 6; 3 Cooley's Briefs on the Law of Insurance, page 2724.
The rule that demand of the past due premium waives the forfeiture does not apply where the premium was earned before the default (Mandego v. Centennial Mut. Life Ass'n, 64 Iowa, 134, 17 N.W. 656, 19 N.W. 877), or where the contract provides that the full premium shall be considered as earned by the default.
Laughlin v. Fidelity Mut. Life Ass'n, 8 Tex. Civ. App. 448, 28 S.W. 411; Union Central Life Ins. Co. v. Chowning, 8 Tex. Civ. App. 455, 28 S.W. 117; Sullivan v. Connecticut Indemnity Ass'n, 101 Ga. 809, 29 S.E. 41; Union Central Life Ins. Co. v. Berlin, 101 Fed. 673, 41 C.C.A. 592; Linn v. New York Life Ins. Co., 78 Mo. App. 192, 2 Mo. App. 201; Baker v. Union Life Ins. Co., 43 N.Y. 283, reversing Sup. Ct. 393; Cohen v. Continental Fire Ins. Co., 67 Tex. 325, 3 S.W. 296, 60 Am. Rep. 24; Fry v. Franklin Ins. Co., 3 Wkly. Law Bul. 161, 7 Ohio Dec. 442; 3 Cooley's Briefs on the Law of Ins., pages 2726, 2727; Robinson v. Pac. Fire Ins. Co., 18 Hun. (N.Y.) 395; Phoenix Ins. Co. v. Tomlinson, 125 Ind. 84, 25 N.E. 126, 9 L.R.A. 317, 21 Am. St. Rep. 203; Bloom v. State Ins. Co., 95 Iowa, 359, 62 N.W. 810; Blackerby v. Continental Ins. Co., 7 N.Y. Law Rep. 653, 83 Ky. 574; Sharkey v. Hawkeye Ins. Co., 44 Iowa, 540; Shultz v. Hawkeye Ins. Co., 42 Iowa, 239; Mutual Fire Ins. Co. of Portland, Oregon, v. Maple, 38 L.R.A. (N.S.) 726, 727; Lehman v. Clark, 174 Ill. 279, 288, 43 L.R.A. 648, 51 N.E. 222, 225; 3 Joyce on Law of Insurance, section 1472a, page 2667; 3 Joyce on Law of Insurance, section 1670, page 2536; Union Central Life Ins. Co. v. Chowning, 8 Tex. Civ. App. 455, 456, 28 S.W. 117; Cohen v. Continental Life Ins. Co., 67 Tex. 325, 60 Am. Rep. 24, 3 S.W. 296.
When a note is given in payment of an insurance premium, and the policy provides, as is provided by the policy in this case, that on default in the payment of the note the policy shall thereby become null and void, there is an abundance of authority to the effect that the forfeiture is waived if, after such default, the insurer demands payment of the past-due note for its full amount, and continues to assert liability against the insured for said full amount; and where there is a provision in a note, such as is contained in the note in this case, that, "in case this note is not paid at maturity, the full amount of said first annual premium shall be considered earned as premium during its currency, . . . and the company shall have the right without waiving such annullment to collect the full amount . . . of the said note," there is authority that such a provision in a premium note is void. 14 R.C.L. 1192, 1193.
But we do not find it necessary to decide either of the foregoing points in this particular case, because the plea of the defendant alleges that, when the agent of the insurer presented the overdue note for the first premium and urged the insured to pay it, the insured failed and refused to pay said note, and the replication of the insured did not deny the said allegation of refusal to pay.
Whatever may be the confusion of authority on these questions, and however much courts have been alert to seize upon available circumstances to prevent forfeitures, we think no sound or well-considered case can be found in any of the books which would maintain the proposition, so destitute of justice, that when an insurance company, being reasonably willing to waive the default, presents a past-due note for a premium, and that offer to waive is met by a refusal to pay, the insured nevertheless continues to be bound. When an insured, or one claiming under him, by suit insists upon such a waiver, the person so insisting is in no position to maintain that insistence, when his position in point of fact has been one of positive, active wrong in the transaction, which is exactly the case when the relative conduct on his part has been, not a mere failure, but a declination of his obligation, and a refusal to recognize it — a refusal to pay. In such a case as is here before us, the insured is unable to unloose himself from his own wrong, in the essential state of facts which make up the case. We therefore agree with the conclusion in such cases as Stephenson v. Empire Ins. Co., 139 Ga. 82, 76 S.E. 592.
The same result is reached by approaching the question from another viewpoint: Insurance is a matter of contract, and contracts, of course, are creatures of voluntary assent or agreement. When the insurance company offered to waive the forfeiture and keep the contract alive, it was an offer which the insured could accept or reject; and when he refused to pay he refused to accept, and thereby rejected. It was not an offer which he was compelled, willingly or unwillingly, to accept, and was not an offer which the company was compelled, and had become bound, to keep open in spite of its rejection. There is nothing in the law of insurance, or so peculiar to that branch of the law, which restricts waivers solely to the insurer. The insured may also waive; and the situation here presented, as it appears to us, may be expressed by the phrase that there was a waiver of the waiver.
Affirmed.